Essential Fintech Reading: July 25 - 31

The naysayers have written off PFM products as having a low adoption rate. Yet ATB Financial, a Canadian regional bank, and Farmers Bank & Trust have driven adoption rates above 40% - 5x the industry average - with a PFM tool from MX, reports Sicily Axton in The Financial Brand. Instead of putting PFM widgets in a standalone tab, ATB made PFM a core part of their user experience to drive a 46% adoption rate within six months. Farmers Bank & Trust encouraged employees to be active users of their PFM solution and share their success stories with customers, greatly enhancing adoption.

By Surprising And Delighting Customers Fintechs Can Excel

Surprising one customer in today's socially connected world can pay huge dividends for fintech startups and outweighs the benefits of a costly PR agency, writes Jessica Ellerm. If savings account holders were surprised with a small deposit as thanks for being an account holder instead of the drain of a monthly maintenance fee, it could increase their loyalty and more than make up for the costs of acquiring new customers. Given that surprises don't cost much and can create addicted, loyal customers, they hold great promise in the fintech space.

Fintech startups are attacking core banking functions like payments, lending, investing, money transfer and advising, putting behemoth banks at risk despite their investments in digital transformation and innovation. According to new research from Adaptive Lab, traditional banking organizations will have to adapt quickly, reports Jim Marous in the Financial Brand. "Bankers are also hesitant to explore new business models that could cannibalize or compete with existing ones and find themselves hamstrung by ... legacy technology, legacy processes, and, in most cases, legacy thinking," writes Marous. In response, Adaptive Lab proposes that large financial institutions develop a "beta bank," an organization with separate leadership and headquarters that will allow the institution to rethink its operating model from the ground up.

How To Survive In The Face Of "Big Bang Disruption"?

Because it is almost entirely digital and the retail and media industries have already been disrupted, finance is the "biggest part of the world left to eat" and fintech companies are poised for growth, writes Bernard Lunn of Daily Fintech. Given that banks squandered trust during the global financial crisis, they also make for an ideal incumbent to attack. Lunn notes that the institutions that want to survive and thrive should look to platforms that can be easily extended and experimented with, following the model of Amazon which easily switched from books to broader retail categories.